ANALYSIS THE EFFECTIVENESS OF IMPLEMENTATION CARBON TAX IN INDONESIA

Abstract

The Indonesian government made a commitment to combating climate change through the introduction of a carbon tax, which the law controlled in harmonizing tax rules UU HPP No.7 Year 2021 in order to reduce greenhouse gases and reach net zero emission in Year 2060. Indonesia delayed the introduction of the carbon tax on April and July 2022, but it still intends to do so in stages in accordance with the road map, the growth of the carbon market, the NDC target, and stable economic conditions. This research aims to describe the effectiveness of implementation carbon tax in Indonesia. Technique analysis data use literature review with descriptive qualitative data analysis and comparative research methodology. The research found that it is crucial to guarantee that carbon price regulation is in place as a management tool to alter behavior and promote innovation and changes in how businesses are managed, particularly those that produce significant amounts of carbon emissions. Due to a lack of alternatives using renewable technology and efficient carbon pricing policies, businesses would be reluctant to change and invest in sustainable business models. Indonesia's carbon tax rate also raises many questions about its effectiveness for changing behavior toward low emission development.